The first component of the strategic management process that involves crafting the organizations mis

what is strategic management process

In his classic Corporate Strategy, he developed gap analysis to clarify the gap between the current reality and the goals and to develop what he called "gap reducing actions". Which skills and capabilities should be developed within the firm? This is most consistent with strategic planning approaches and may have a long planning horizon.

If those actions are not successful, then repeat the strategic management process.

Role of strategic management

It's more important than ever to define yourself in terms of what you stand for rather than what you make, because what you make is going to become outmoded faster than it has at any time in the past. Porter claimed that a company must only choose one of the three or risk that the business would waste precious resources. Clarify Your Vision The purpose of goal-setting is to clarify the vision for your business. This is most consistent with strategic planning approaches and may have a long planning horizon. Implement Your Strategy Successful strategy implementation is critical to the success of the business venture. Prior to , the term "strategy" was primarily used regarding war and politics, not business. Prahalad and Gary Hamel suggested that companies should build portfolios of businesses around shared technical or operating competencies, and should develop structures and processes to enhance their core competencies. If the overall strategy does not work with the business' current structure, a new structure should be installed at the beginning of this stage. What are the important opportunities and risks for the organization? Sharing activities: Ability of the combined corporation to leverage centralized functions, such as sales, finance, etc.

Kiechel wrote in "The experience curve was, simply, the most important concept in launching the strategy revolution He felt that management could use the grid to systematically prepare for the future.

Make sure to identify both the strengths and weaknesses of your organization as well as any threats and opportunities that may arise along the path.

If you determine that the strategy is not moving the company toward its goal, take corrective actions.

Characteristics of strategic management

Evaluate and Control Strategy evaluation and control actions include performance measurements, consistent review of internal and external issues and making corrective actions when necessary. Adaptive strategy: In this model, the organization's goals and activities are primarily concerned with adaptation to the environment, analogous to a biological organism. Chaffee further wrote that research up to that point covered three models of strategy, which were not mutually exclusive: Linear strategy: A planned determination of goals, initiatives, and allocation of resources, along the lines of the Chandler definition above. The growth-share matrix, a part of B. Everyone within the organization must be made clear of their responsibilities and duties, and how that fits in with the overall goal. Porter defined two types of competitive advantage: lower cost or differentiation relative to its rivals. He felt that management could use the grid to systematically prepare for the future. The framework involves the bargaining power of buyers and suppliers, the threat of new entrants, the availability of substitute products, and the competitive rivalry of firms in the industry. Once prioritized, begin formulating the strategy. Any successful evaluation of the strategy begins with defining the parameters to be measured. In five forces analysis he identified the forces that shape the industry structure or environment. Bruce Henderson [15] In , Henry Mintzberg described the many different definitions and perspectives on strategy reflected in both academic research and in practice. This was called the production orientation. Prahalad and Gary Hamel suggested that companies should build portfolios of businesses around shared technical or operating competencies, and should develop structures and processes to enhance their core competencies.

Prahalad and Gary Hamel suggested that companies should build portfolios of businesses around shared technical or operating competencies, and should develop structures and processes to enhance their core competencies. The strategist "deals with" the environment but it is not the central concern.

7 steps of strategic management process
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The Five Stages of the Strategic Management Process